Moscow (AFP) - The Russian ruble on Monday fell to new lows despite repeated interventions by the central bank to keep the national currency afloat.
The ruble crumbled to 58.81 to the dollar and 73.23 to the euro after the Moscow Exchange opened Monday morning.
The slump came even though the Central Bank has spent nearly $6 billion so far this month on market interventions to slow the ruble's slide.
The bank made interventions every day last week, and on Thursday decided to hike its key rate by one percentage point to 10.5%.
The ruble's depreciation continued through the weekend however, pulled down by a global slump in oil prices and the effect of Western sanctions imposed over Moscow's annexation of Crimea and its role in eastern Ukraine.
"During a crisis like the one Russia is experiencing now, only changing expectations can lead to stabilisation," economist Maxim Buyev wrote in the Vedomosti daily to explain the seemingly unstoppable slide of the national currency.
"The government must offer a clear plan of reforms," he added.
Vedomosti further reported Monday that the government plans to cut budget spending by 10 percent in 2015. The cuts would impact transportation programmes as well as spending on space, aviation and development of the rar east, the report said.
The 2015 budget is balanced on the assumption of selling oil at $95 per barrel -- a price well above the current level hovering around $60.
Bank of Russia will have to pay enormous premiums to stabilise the ruble. http://bloom.bg/1sta40l via @BloombergNewsOriginally Posted by OUTLAW 09
pic.twitter.com/CEaePGrPSs
Interfax from today:
14:27 Budget may run out of foreign currency to offer banks in deposit auctions by end-Q1 2015 - Moiseyev
Last edited by OUTLAW 09; 12-15-2014 at 02:31 PM.
The Russian economy is now crashing far faster than the Russian CB can keep up with.
Citing "devaluation and inflationary risks" Central Bank raises key rate to from 10.5% to 17% http://www.cbr.ru/press/pr.aspx?
Russians are struggling to find anyone to sell them ANY foreign currency in exchange for their worthless rubles. The panic is on.
Russian bond yield climbs above Rwanda's. Yes, you read that right...
http://on.ft.com/1zdWvYW
pic.twitter.com/TdXaFf66pz
#Russia Ruble Nose-Dives To 63 To Dollar,78 To Euro lost 48% more than 47% of #Ukraine Hryvnya http://bit.ly/1sur4mZ pic.twitter.com/1PsNafE4g5
The Central Bank of Russia spent $2-3bln trying to support the ruble today.
http://liveuamap.com/en/2014/15-december-the-central-bank-of-russia-spent-$23bln-trying …
#Russia banks have $60bn debt coming due in next months.
Central Bank will have to bail them out with money meant to defend falling #ruble
#Russia's central bank blames the Russian people for making the ruble devalue. http://top.rbc.ru/finances/15/12/201...e5964f117fc581 …
Russian CB raised rates to 17% at 0100 in the morning. the ruble will take a serious hit in the morning when the market opens although in other over night markets it is now falling.
MASSIVE interest rate hike may not work. Ruble's already on its way back down!
http://bit.ly/1qTk2gj
Drastic, bold measure by Nabiullina and Central Bank but needed to be a week ago. Has she tried to slam the door after the ruble has bolted?
Hiking interest rates punishes Russian consumers instead of oligarchs (capital controls) or sacrificing strategic goals (spending reserves)
A week ago when asked why the Central Bank of Russia didn't hike the rates in more aggressive way, they said they didn't want to cause panic
Can the day get worse for #Putin?
YES it can :-)
#EU agrees on more sanctions vs. #Russia b/c of #Crimea/#Donbas.
#ruble to fall faster now.
Kirill Rogov on FB: If Central Bank hikes rate to 17% at night,there is sth we do not yet know in add. 2 bleak consequences we already know
Ruble & stock market fall not just a reaction to low oil prices & sanctions, but also distrust of gov economic measures
So they took out the big interest rate bazooka. I confess I'm surprised by the boldness of the move.
It is just amazing to see such a vast gulf between the interest rates of the Western World and Russia. Fact is stranger then ficition...
... "We need officers capable of following systematically the path of logical argument to its conclusion, with disciplined intellect, strong in character and nerve to execute what the intellect dictates"
General Ludwig Beck (1880-1944);
Speech at the Kriegsakademie, 1935
Early round up of comments on the blogger side concerning the rate hike to 17%.
Ruble was initially up 9% but has fallen now 4% and looks to fall back again in the coming hours especially after the Swiss bank CS indicates it is now anticipating Russian companies going into default as they basically owe in the coming 24 months 650B USD that needs to be serviced and they cannot.
If they default in large numbers it will hit western banks badly.
Duma deputies already calling for central bank governor Nabiullina's head. Because clearly everything is her fault.
Ruble crisis "risks turning into a broader market emerging rout". @AmbroseEP on the chaos. http://www.telegraph.co.uk/finance/e...shes-13pc.html …
The Moscow Times ✔ @MoscowTimes
#Russian State Media Downplays Extent of Ruble Crisis
http://tmt-go.ru/513367
Credit Suisse Says Russian Company Defaults Are ‘Inevitable’
http://www.bloomberg.com/news/2014-1...itable-1-.html …
In a few minutes, the #Russian #ruble strengthened 9% then fell 4% again
pic.twitter.com/WDstNO7qiS
Russia economic black humor
Under the Central Bank: "The dollar is at 66! What do we do?" "17!!!" "17 what?" "I dunno, raise something to 17."
pic.twitter.com/22pQvC7y11
All the interest in the ruble appears to have crashed the Moscow Exchange website, http://moex.com , this morning.
Second day of a economic rout is building and is in the middle of starting ---as the rate hike did not impress the market and the RCB rally has nothing left to throw at the problem as it now requires Putin to make a decision---pull completely back on the Ukraine and compromise on Crimea or play the military card which will drive the market even lower.
"Panic selling" of Russian equities will continue today, according to analysts from a big US investment bank.
Russia may have to ask the IMF for a bailout. http://www.washingtonpost.com/blogs/...s-that-simple/ …
Three reasons for RU economic crisis: western sanctions, dependency on oil, lack of trust in competence of regime (Kudrin).
You know it's getting out of hand when.....Moskovsky Komsomolets newspaper starts rate-hike live blog http://www.mk.ru/economics/2014/12/1...-otstavku.html …
Markets not inspired by Nabiullina's midnight rate hike - dollar rising past 63.50 now, no sign of intervention.
Rouble is tumbling again after briefly holding up, and signs of elite battle breaking out. Kudrin criticising Sechin, Rosneft criticing CB.
Russia’s Economic Problems Exacerbating Moscow’s Relations with Republics, Tatar Analyst Says http://goo.gl/7tZYQG
ruble back in negative territory now, 64.64/$ as the rate hike seems to have left the market less than impressed
Collapse is deepening and gaining speed and there is no much more the RCB can do but wait it out---Putin needs to make a clear geo political decision which would slow it down but will he?
Ruble crash gains momentum. New low against the USD is 65.8477.
pic.twitter.com/Uds768KLbR
NOTE-currency exchange businesses have ordered signs that would allow three digit US/Ruble quotes so they are anticipating a potential of at 100 to one
Off we go again. Over the cliff. Ruble resumes is dive vs $ to 66 or so. http://www.xe.com/currencycharts
NOTE: now over 66
NOW oil price is diving under 60 which will reinforce the ruble drop
Crude Oil Brent hit a new low trading at $59.85
Pro-Kremlin media just giving up now as the ruble plumbs new depths.
pic.twitter.com/aUtIvM9cd9
Ppl gather in front of the National Bank demanding back their deposits from a commercial bank, old currency exch rate for USD loans
Ruszen.ru gives Zen calmness in face of falling rouble. But have you seen the genius Belarusian equivalent belzen.by?
So... How about Moscow the global financial centre? Ruble the reserve currency? Oh, but Crimea is ours.
#Russians indeed have started to use old Soviet anti-inflation / unreliable currency trick - drain your account & buy whatever you can buy.
Great short article from BBC Financial Editor on the Russian economy.
http://www.bbc.com/news/business-30491170
#Russia business elite says 2014 rendered to zero efforts in last 15 years.
pic.twitter.com/fiJ8Vhx1UJ
Last edited by OUTLAW 09; 12-16-2014 at 10:51 AM.
Nabiullina: we should learn to live in new zone, focus on own sources of financing (Part 2)
MOSCOW. Dec 16 (Interfax) - The head of the Central Bank of Russia, Elvira Nabiullina, has commented on the regulator's decision to sharply raise the key rate to 17% from 10.5%.
"In order to limit the negative effects of the weakening of the national currency's exchange rate, we have decided to raise the key rate from 10.5% to 17%. This is decision is directed toward lowering inflation and inflationary expectations," she said in an interview on Russia-24 television channel.
According to the Central Bank, the weakening of the national currency's exchange rate is happening due to falling prices for oil and the closure of Western capital markets for a number of Russian borrowers. Nabiullina added that the Central Bank had recently placed the ruble in free float. This will allow for the effects of negative external factors on the Russian economy to be mitigated.
She said that the weakening of the exchange rate is a signal for the Russian economy to adapt to new conditions. "We should learn to live in the new zone, focus to a large extent on our own financing sources and projects and give import substitution a chance," the Central Bank head said.
Nabiullina said the Central Bank believed that Russian companies are able to pay back foreign debt. "In order to smooth out this process, we are developing our own instruments. We are giving them forex on loan," she said.
In order for the increased rate not to stop Russian projects from developing, the Central Bank has left special instruments and their rates unchanged, Nabiullina said. This concerns investment projects, project financing, projects aimed at supporting small and medium business and commodity exports.
Ruble rate held for a couple of hours steady at 66 and then took off again and has officially cross the 70 to 1 ratio---the 17% maneuver has formally failed.
As the ruble crosses 70/$ (!) for 1st time, it's a good time to start thinking how a Russian economic crisis could affect rest of the world
Ruble crosses 73 to 1---then this blog comment hit
God, at this rate will Putin even be around to do his press conference on Thursday?
Ruble -32% against the dollar in just three days. Epic collapse. pic.twitter.com/IWPNhx7W5q
Dollar at 76 and the Euro at 92
Чорний вівторок російського рубля
$ - уже 76 руб, € - 92 руб
pic.twitter.com/gliDxqoeOe
BBC Russian covering #rouble fall live
http://www.bbc.co.uk/russian/russia/...alflow_twitter … This is big
Last edited by OUTLAW 09; 12-16-2014 at 12:24 PM.
Sberbank Moskau : 1 € = 99 Rubel
pic.twitter.com/uqmlfTYtD6
Interfax, usually reliable, reports that #Gazprom is considering firing 15%-25% of its 460,000 staff, citing sources. Huge if true
The repeated Rosneft statements that it was not behind ruble sell off obviously aimed at one person. Sechin seems visibly nervous
A crisp explanation by @AndrewKramerNYT on the opaque Rosneft bond issue that contributed to the ruble's plunge.
http://www.nytimes.com/2014/12/17/bu...est-rates.html …
https://meduza.io/news/2014/12/16/zh...zicheskih-lits … Reports that Sberbank, Russia’s largest bank, has stopped all lending to individuals in Russia.
Last edited by OUTLAW 09; 12-16-2014 at 12:58 PM.
Rosneft spokesman Leontyev says Central Bank shot Russian economy 'so it doesn't suffer'. Others say it was Rosneft.
http://pda.rusnovosti.ru/news/357602
The Russian foreign currency exchangers have cracked the 100 mark with their exchange signs.
Crack! Va @jfarchy
pic.twitter.com/p1Gy9JHl5D
It just keeps on getting worse---interesting to see if again at 0100 tonight the RCB does a "shock and awe" move.
Vneshprombank is selling dollars for 100 rubles and euros for 120. Межтрастбанк (next door) stopped currency exchange
pic.twitter.com/1F5tBldsnX
The rouble plummets, starting a Black Tuesday for Russia. Why are all the investors fleeing? http://econ.st/1vVL2HB
pic.twitter.com/Z1tZ2h1XMH
Hold onto your ushanka! RT @AFP: #BREAKING Russian central bank says ruble slide 'critical', to take further measures [v @Verkkomeedio]Microcosm of the crisis: Sberbank branch on Tsvetnoy Bulvar started day with $100k in cash. Now (7pm) just $100, cashier tells me
Will Russia Introduce Foreign Currency Controls?
http://bit.ly/1xpqFJB
Sounds like the 30s in the States:
Co-owner of financial services company committed suicide in a Moscow hotel
http://www.interfax.ru/russia/413508
Crude oil is starting to roll over.
In late morning trade, West Texas Intermediate crude oil futures were giving up earlier gains and were down more than 1% on the day. WTI futures were down near $56 a barrel on Thursday, after briefly touching $59 a barrel earlier.
On Wednesday, crude oil had a wild ride, spiking ahead of the Federal Reserve's announcement before giving up those gains.
Near dawn in New York, crude again rallied, but in following with yesterday's pattern, these gains are evaporating.
Crude oil has crashed over the last several months and the market is looking for the bottom in oil prices.
But the second day in a row, a crude rally looks like it's failing.
http://uk.businessinsider.com/crude-...#ixzz3MGXd9t3l
Interesting that the author of this article is also starting to ask the question--has through corruption the Russian economy been on large Ponzi scheme for the oligarchs. With a an estimated national reserve of 900B which should have been ===where did the money in fact go---for houses in London?
http://krugman.blogs.nytimes.com/201...ian-debt/?_r=0
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